Some news and views from UK academia and practice on the law, policy and practice of insolvency

Monday, 6 June 2011

Olympic Tickets: How I beat the System (and Boris!)

When John asked me to blog for his site, I am sure that he didn't think I would get him this much coverage!

This note is just to set out the approach I took to succeed in getting Olympic Tickets where so many appear to have failed. I also want to make it clear what risk I thought I was taking. I am by no means a mathematical or statistical expert and without any prior information on the odds of winning tickets I am not sure there could have been any accuracy in working out the odds before the recent ballot process.

If we take simple binomial theory, you can calculate the odds on certain events happening with a fixed number of attempts with fixed odds each time. In the case of a coin toss, the chances of it being heads on one toss is Evens, on two tosses the chances of getting at least one head is higher and the chances of them both being heads is lower. Add a third coin toss and the chances of getting at least one head goes up and the chances of all three tosses being heads becomes much greater. The Olympic ballot permitted bids for up to 20 events so if the odds of succeeding on each were the same as a coin toss then the chances of getting more than one event would be all but certain, with a guesstimate that you would expect about 10 events.

Of course I had to assume that the odds for each of the popular events would be more than evens. Even at 2:1 the odds change dramatically. At say 10:1 the odds of getting one or two tickets becomes quite low and all of them quite impossible.

But it is not that simple. You could bid for different tickets in a range for each event. In that case each event becomes its own binomial experiment. If there were say 10 tiers of ticket and the odds were 10:1 on each, you might expect to get at least one of each so overall you might succeed in getting one for each event applied for. If there happened to be a single tier of price for each event which was not oversubscribed then you would be certain of getting that ticket or better. Assuming that the ballot was held on each event on a reducing price basis starting with the most expensive tickets, you would also have a tendency to be successful for more than the cheapest. In fact, you might assume that most people would apply for the cheaper tickets so there would be much less competition for the top tiers. Against this you might assume that there were less of these which might even things up but LOCOG gave no information on this.

You can see that the combinations become mind-boggling, and without knowing whether the odds are 10:1 or 100:1 you cannot confidently predict the outcome. I did however make a working assumption that all tiers would be oversubscribed and therefore the general binomial principles would apply in that the chances of getting some increase with the amount of bids and the chances of getting them all reduce.

Having decided on my 20 choices it was of course important that I would be happy if I only received one of them. In my case the headline figure was £35,918 but that is the sum of the top tickets applied for in every tier. If I succeeded in half of them at the mid-price tier on average, you would expect the amount to be £9,000 if the prices were reducing evenly (but they are not. They are not even evenly priced in comparison to each other). Odds are all very well but in the case of the Olympics the top price of some of the tickets were huge. The Opening Ceremony costs run from £2012 to £20.12 and the maximum you could bid for was 4. The risk range on this event alone was therefore £8,048 to 80.48. If you happen to get the top rate then this makes the total sum potentially much larger and throw out any broad assumptions you might make.

This takes me on to the thorny issue of the credit limit provisions. The bidding rules seemed clear. By taking part in the application process you were not contracting to buy the tickets. If the funds were not in place at the time requested then the application would be rejected. This was very important for me as I could not be put in a position where the application left me financially embarrassed. What this provision did mean was that you could add an element of capping to the bid process. If you get your binomial-based guess completely wrong then your risk was limited to the amount of your bank balance or credit limit. It would be unfortunate if your application produced a request for an amount £10 over your limit but it did cap your risk. The existence of this provision led me to conclude that many people would bid beyond their credit limit and that all events would be greatly over-subscribed. It seems I was wrong. I have heard no stories of limits being exceeded except in my case, and I bid what appears to have been an exceptional amount! No doubt my error on this point alone meant that the chances of succeeding in more than one event was higher than I thought.

In my case I received an email saying that an attempt had been made to take funds and that this had been rejected. The polite email suggested that a second attempt would be made in a few days to give me a chance to put things right. The consequences of a second rejection was that they would not contact me again and I would not receive my allocation. No fuss and no financial penalty. The second chance was not in the bidding terms & conditions but the consequences of rejection were. I contacted by credit card company who confirmed the amount rejected. I then asked for an increase in my limit and explained the reasons for it and this was granted.

This was an unexpected twist and probably rendered much of the previous calculations moot. I had a simple and well-informed (at least in part) choice. I could choose to pay a large fixed sum for the certainty of some tickets from the 20 events I selected or choose to have none at all. In this I was more fortunate than most, including Boris. If I could meet the initial cost and wait, I could have some choice in how to use, sell or return some or all of the tickets. That comes at a price, but it is better than being powerless in a blind ballot.

As I write I wait to hear what my £11k successful bid actually amounts to. On the basis that I have set out above it is much more likely statistically that I have succeeded on one large event and one or two smaller ones than the sum of a lot of small events only. Hopefully in any case, my relatives and friends will recognise the value in getting THEIR bids in to me early, particularly before my credit card bill is due. Act now to save disappointment!!!!

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Bankruptcy Blog - moving to Jordans Insolvency web service

The Bankruptcy Blog is proud to announce a new venture with Jordans Publishing and Guildhall Chambers that will see the launch of a new insolvency e-newsletter in April/May 2011. The newsletter will contain exclusive insolvency updates, bite-size case summaries on personal insolvency, corporate insolvency, cross-border issues and opinions on wide ranging topics of practical interest. The blog will form part of the new insolvency news service.

For the next six months or so a number of guest bloggers will post on the site. Professor Emily Kadens, of the University of Texas Law School, will be providing blog entries on her work highlighting her investigations into the history of English insolvency law. Please see here for more information on Professor Kadens. Professor David Graham QC will also be contributing material on his ongoing research into the history of the subject.

John Tribe notes:

This blog supports my insolvency law and company law teaching and scholarship. It is primarily an online notepad where I record important developments, news and other items that interest me. I occasionally also profess some general thoughts and ideas on the subject on the personal side and on the corporate side.

The primary audience for the blog is of course my insolvency law students and company law students. In this respect it is hoped that the blog will aid in Whitehead's vision, i.e. that “the proper function of a University is the imaginative acquisition of knowledge.” (A.N. Whitehead, 1929: 139, 145). It may also be of use to anyone else who has an interest in the subject. Those readers are also most welcome! The majority of photographs that appear on this blog are exhibits from the Muir Hunter Museum of Bankruptcy at Kingston University. The photographs were taken by Glen Pearson, an award winning professional photographer. Those pictures that are not from the museum collection and the reproduced secondary source material fall within s.32(1)(c) of the Copyright, Designs and Patents Act 1988.

This blog hopefully goes some way to rebut Lord Mishcon's view that, "Insolvency is not a very thrilling or amusing subject." (Lord Mishcon, Hansard , 15 January 1985). The blog is also my attempt at answering Montagu’s contention that: “Our professional duties consist, not merely in activity and in publication upon some practical part of professional knowledge, which repay themselves; but in availing ourselves of every opportunity to visit and strengthen the route and foundation of the science itself.” (Montagu, B. Some Observations upon the Bill for the Improvement of the Bankrupt Laws. Butterworths, London, 1822, at page 73). However, if you want to retain, "a mind unclouded by the study of English bankruptcy law" (Turnour Murray, A. Bankruptcy of Partners (1891) 7 LQR, 53-62, at page 54) look away now before it is too late!

A series of guest bloggers will also make contributions to the site over the coming months. Details will appear in due course. In addition to the news and policy discussions that make up the meat of this blog I plan in due course to go back through the nominate reports and add up case law summaries from old bankruptcy reports, afterall, as Mansfield observed: "A statute can seldom take in all cases, therefore the common law that works itself pure by rules drawn from the fountain of justice is for this reason superior to an Act of Parliament.”(per Lord Mansfield in Mychund v. Barker (1744) 1 Atk at page 33.)

The views and opinions expressed on this blog reflect those of the blog post authors and no institution or organisation. In terms of errors, the usual caveat applies. If you have any feedback or questions in relation to the blog (or find a link that is not working), please e-mail me: j.tribe@kingston.ac.uk